Removing Barriers Blog

CUNA and other Trades Send Roadmap to DoD For Curtailing Unintended Negative Consequences from MLA

In a letter to the Department of Defense concerning the implementation of the Department of Defense’s amended Military Lending Act (MLA) Regulation, CUNA and the American Bankers Association, the American Financial Services Association, the Association of Military Banks of America, the Consumer Bankers Association, the Independent Community Bankers of America, and the National Association of Federally-Insured Credit Unions outlined ways to improve upon unintended negative consequences of the rule with suggested recommendations and clarifications 

The letter explains that despite almost a year’s experience under the amended Regulation, confusion remains about the meaning of several of its most important provisions. Additionally, it points out there remain multiple inconsistencies between the Regulation and the Department’s Interpretive Rule. Together, this confusion and these inconsistencies make it likely that service members and their families might not have full access to safe and responsible credit options. 

The letter urges the DoD to issue an interim final rule amending the regulation so that there is a single, consistent source of law for servicemembers and their families and the financial institutions that serve them, as well as for regulators and courts. It notes that, “While the industry appreciates the Department’s efforts to provide guidance through the August 2016 Interpretive Rule, interpretive guidance does not address issues that require a change to the regulation itself, especially those provisions that are inconsistent with the regulation. In any legal challenge, the regulation will prevail over an interpretive rule if there is any inconsistency.” 

The letter further explains what the Secretary of Defense has the authority to adjust MLA requirements and provides detailed analysis of changes that should be made. To read the full letter click here.